Home / Shipping News / Interviews / New low sulphur fuel requirements on ships at berth at EU ports pose cost challenges for ship owners

New low sulphur fuel requirements on ships at berth at EU ports pose cost challenges for ship owners

The coming into force of the new EU Directive (from the 1st of January), which requires the use of maximum 0.1% sulphur content fuel on ships berthing at EU ports poses new challenges for ship owners, whose vessels aren’t properly equipped to

run on those fuels. In an interview with Hellenic Shipping News Worldwide, Mr. Reisopoulos,Β  the Germanischer Lloyd’s Vice President, Area Mediterranean/Southern Africa, details what measures each ship owner must undertake, in order to fully comply with the latest regulations.

GL recently held an interesting Workshop in Athens on the latest EU rules on the use of Low Sulphur Fuels. How has the shipping industry welcomed this latest implementation of the EU Directive coming into force this year?

The implementation phase of the EU Directive 2005/33EC, which requires the use of maximum 0.1% sulphur content fuel on ships at berth at EU ports, started on the 1st of January 2010. The aim of this Directive is to reduce SOx emissions by restricting sulphur content in the fuel oil. The shipping industry faces the requirements of the above Directive with great concern since there are still a number of implementation and interpretation issues, which need to be clarified.
GL organized, with the support of Aalborg and MAN, this Workshop on 28 January this year in an effort to clarify, jointly with the main boiler and diesel engine manufacturers, as many technical and procedural unsolved issues as possible.
The presence of approximately 200 participants of the Greek shipping community as well as the lively discussions that followed the presentations showed that the Workshop met its target.

What steps must each ship owner undertake in order to comply with these new rules?

The steps that need to be taken by owners and/or operators in order to comply with the EU Directive 2005/33EC are the following:
a.Β Β Β  Determine whether they intend to operate their ships within the areas affected by the above mentioned Directive,
b.Β Β Β  Contact boilers’ and diesel engines’ manufacturers and associated system providers who in turn will assess suitability of the respective boiler or diesel engine to operate with low sulphur fuel oil.
It will be the sole responsibility of the owners/operators to ensure, based on the assessment of the manufacturers, that their vessels are suitable for operation on low sulphur fuel oils.
c.Β Β Β  Follow manufacturers’ instructions with respect to possible boilers/diesel engine design modifications. Such design modifications might affect the following installations and equipment:
“ΆΒ Β Β  Fuel capacity and tanks’ arrangement for the different grades of fuel oil.
“ΆΒ Β Β  Fuel oil supply: pipes, pumps, cooler/heater, fuel oil booster system.
“ΆΒ Β Β  Main propulsion and auxiliary engines (at berth normally auxiliary engines only): fuel cooler might be necessary to be installed and gear type fuel pumps might have to be replaced.
“ΆΒ Β Β  Main and auxiliary boilers: Burners and Burner control systems might have to be adjusted/ replaced.
d.Β Β Β  Submit drawings and documents which will include all above mentioned modifications, including materials and safety arrangements, to the respective classification society for approval.
A Hazard Identification study (HAZID) to be prepared with the assistance of the designers and be submitted for approval as well.
e.Β Β Β  Instruct the manufacturer to carry out all necessary alterations/modifications in accordance with the approved drawings and invite Class surveyor for verification.
f.Β Β Β  Carry out an operational test, in presence of a Class surveyor, who will also verify that the modification has been carried out according to the Class approved drawings and the crew has familiarize itself with the change-over procedures from heavy fuel oil (HFO) to low sulphur marine gas oil (LSMGO).
g.Β Β Β  Issuance of a “Factual Statement” by the classification society as evidence of compliance with the said Directive.
It has to be underlined that the 0.1% sulphur content marine gas oil characteristics and fuel quality aspects are a matter of concern.
Viscosity, lubricity, flash point and contamination (including the use of bio-fuels) are elements on which limited information/experience is available at the present time.
Main points of concern are:
“ΆΒ Β Β  Fuel switching related problems,
“ΆΒ Β Β  Flame failure leading to the formation of an explosive atmosphere in the boilers and,
“ΆΒ Β Β  Lack of experience of the crew in switching from HFO to LSMGO.

What does GL Group advise its clients on that matter?

Apart from the Workshop mentioned above, GL has drafted an in-depth guideline on maintaining engine and boiler safety when using low sulphur distillate oils in order to assist operators/owners to fulfill legal as well as operational requirements.Β  Both the Guideline and the presentations have been made available to the participants of the Workshop and can be made available to those interested.
GL urges operators/owners, whose vessels will in the future berth at European ports, to take all necessary measures in order to comply with the Directive 2005/33EC as soon as possible.
The European Commission, with its Recommendation of 22 December 2009, in order to facilitate the implementation of the Directive, has suggested Member States to tolerate an extension of the implementation of the use of low sulphur fuel oil for a period not exceeding 8 months. According to this Recommendation, ships which fail to comply with the 0.1% low sulphur requirement will need to provide evidence that they are proceeding with the technical adaption and certification. Such evidence shall include a class approved retrofit plan, a contract with the manufacturer as well as a statement indicating the date of completion.
However, the above mentioned Recommendation does not guarantee that Member States will not impose any penalty for non-compliant vessels, especially after the recent tough line of the Swedish Authorities who announced that they will not allow any exemptions or introduce a lenient approach to vessels that cannot change to 0.1% sulphur content fuels for technical reasons.
GL is well prepared to assist owners whose vessels are prepared for certification as well as vessels that need to make use of the extension period for compliance.

How expensive is such a step?

During EMSA’s technical meeting in Lisbon on 15 October 2009, where owners (represented by ECSA, OCIMF, INTERTANKO and SIGTIO), IACS and AALBORG expressed their stance to the Directive, the issue of cost for applying this requirement has also been discussed.
“ΆΒ Β Β  Small boilers: installed onboard all types of ships, the costs for modification, if needed, is up to 25,000 Euros.
“ΆΒ Β Β  Large boilers: this particular type of boiler, commonly installed on tankers to produce steam for cargo operations, the cost for modification is in the range of 150,000 Euros.
“ΆΒ Β Β  Main Propulsion Boilers: These boilers are used for main propulsion, shipboard electricity generation and cargo operations. This type of boilers is commonly fitted onboard LNG carriers. In this respect it has been estimated that approximately 260 ships need to be modified. The costs are difficult to estimate and figures ranging from 70,000 to 1,400,000 Euros per ship have been sited with a median of around 600,000 Euros.
It has to be noted that these costs do not include costs for taking the ship out of service if modification are done outside a regular dry-docking.

“ΆΒ Β Β  Auxiliary Diesel Engines: If modifications are need to the tank and fuel supply system including the replacement of heavy fuel oil pumps and the installation of a cooler, the cost will range between 25,000 and 50,000 Euros.

Is it technically possible for all types of engines, or will some of the older ships stop working in EU ports?

It is the manufacturer who is also the designer, the one who will assess and decide on the suitability of the boiler or diesel engine to burn low sulphur fuel oil and proceed with the required modifications, if needed. Up to now, there has been no report that an existing old type engine or boiler was assessed by any manufacturer as being beyond modifications in order to burn low sulphur fuel oil. It seems that it is only a matter of cost.

Is there adequate supply of low sulphur fuels in the market?

It is the responsibility of the Member States to ensure that adequate low sulphur fuel oils of all grades exist in the EU ports. Up to now, there is no information about non availability as a very small percentage of vessels approaching EU ports are already in compliance with the Directive.

The financial crisis certainly had a heavy impact in the shipping industry as well. How did GL in Hellas fare during the previous year?

The crisis has affected GL as everyone in the shipping industry, but we made use of this last year to get ourselves prepared for the better years to come. Germanischer Lloyd, in order to assist its clients in these difficult times, has introduced a number of services besides its traditional classification work, under the name MarSol (Maritime Solutions).

Classification societies face serious challenges in today’s market, in order to provide the best service possible to their clients. What types of GL’s services would you point out as market leading and rather competitive?

As discussed above, MarSol includes consulting services, training services, software packages etc.Β  GL’s maritime software units are developing market leading software products and provide implementation and integration systems, training and support.Β  The most attractive ones for the Greek Market are the software packages for ship operations and more specifically the “Hull Manager” and “Ship Manager”.
GL ShipManager is a comprehensive software suite that supports key ship management processes, such as planned maintenance, purchasing, stock control, voyage management, port clearance, incident management, and quality and safety management.
GL HullManager advances our ship management software offering for enhanced maintenance support. It facilitates the complete Hull Integrity process, starting from inspections, via reporting and assessment of the conditions of tanks, cargo holds, coatings etc.

As one of the leading classification societies, have you witnessed many delays of newbuilding deliveries or even cancellations by your clients?

Germanischer Lloyd has been facing mainly shifting of deliveries of new buildings for a period of 1 to 3 years in Korea and China.Β  Of course there have also been cancellations but what seems very promising for the Greek market and GL-Hellas is the fact that many Greek shipowners, including those traditionally operating bulkers and tankers, are continuously purchasing new container ships currently laid-up, as an investment for the future.

Nikos Roussanoglou, Hellenic Shipping News Worldwide

Recent Videos

Hellenic Shipping News Worldwide Online Daily Newspaper on Hellenic and International Shipping